72 Provisions of the Articles of Association concerning the appropriation of profit

73 Appropriation of profit

73 Branches

74 Miscellaneous

74 Five-year summary

76 Companies and management

78 Corporate Governance

95 Information on the company structure and control pursuant to

99 Provisions of the Articles of Association concerning Special Rights

100 Provisions of the Articles of Association concerning Approval of Resolutions

the Decree on section 10 of the Takeover Directive

by the Board of Management in accordance with Article 20

Report of the
Supervisory
Board
To the shareholders

the report for 2013 provides a sound basis for

We have pleasure in presenting you with the Report

meeting our accountability obligations in respect

of the Supervisory Board for the year 2013 - a year

of our supervision of the actions of the Board of

when there was a pause in the growth in revenue

Management. We therefore recommend that you

seen in recent years. Although some market groups

adopt the 2013 Financial Statements as presented.

enjoyed good growth in 2013, revenue fell more
than expected at others. Despite fierce competition,

Dividend

most market groups have substantial opportunities

In 2013, Nedap’s revenue increased from € 171.9

for growth and so it is essential that we invest in

million to € 173.7 million and the profit after taxes

strong propositions and the further professionalism

came to € 9.8 million (2012: € 13.5 million). This

of the organisation in order to benefit from them.

resulted in earnings per share of € 1.46 compared

This vital investment did, however, depress profits

to € 2.01 for 2012.

in 2013.
Nedap’s dividend policy is guided by strategy and
Financial statements

long-term policy and is to pay out the entire profit

The financial statements have been audited

to shareholders less any additions to reserves

by KPMG Accountants N.V., whose unqualified

that are deemed necessary for the continuity of

Independent Auditor’s Report is included in the

Nedap’s organic growth and to maintain solvency

Other information. At our request, the auditor has

of 45% in the medium term. The aim is to maintain

issued a more extensive report this year, tailored

as consistent a line in dividends as possible

specifically to Nedap.

and, in the circumstances, a fair dividend for the
shareholders.

As in previous years, the final audit meeting
between KPMG Accountants N.V. and the Board of

Expressed as a percentage of total assets, with

Management was also attended by a delegation of

equity determined excluding the dividend payable,

the Supervisory Board. The Independent Auditor’s

the solvency ratio fell from 38.9% to 36.6%

Report and the 2013 Annual Report as drawn up

in 2013. Ignoring the effects of International

by the Board of Management, consisting of the

Accounting Standard 19, the solvency ratio would

Report of the Board of Management, the Financial

have risen from 39.2% to 41.0%. By prohibiting

Statements, the Other information, Miscellaneous

the corridor method for pensions, IAS 19 will lead

and Corporate Governance, were discussed by

to greater volatility in equity from 2013. As the

the full Supervisory Board with the Board of

application of IAS 19 does not affect cash flows,

Management and the auditor. As shown by its

this IFRS obligation is ignored when calculating

comprehensive report, the auditor did not have any

solvency. The Board of Management expects to

material comments.

achieve the desired level of a solvency ratio of
45% in the medium term.

We received ten regular financial reports from

4

the Board of Management during the year, which

With this in mind, in accordance with Article 45

we discussed at length during our meetings.

(1) of the articles of association, the Board of

We also received a lot of information about

Management and the Supervisory Board have

the state of the market groups’ business from

decided that € 2.4 million should be added to

presentations given by market group leaders and

the reserves, leaving € 7.4 million available as a

site visits. On this basis, we are confident that

dividend. The dividend per share is therefore

€ 1.10 (2012: € 1.51). Although solvency has not

-

Technical risks have also increased. New

yet reached the desired level, in our opinion an

products are being launched faster and on a

unchanged payout ratio of 75% of the profit to the

larger, sometimes global, scale. If there is a

shareholders is appropriate.

problem with a product, the consequences are
greater than in the past.

Meetings and activities

-

International customers are increasingly asking

During the year, the Supervisory Board met six

Nedap to take final responsibility for rolling

times. All of the meetings were attended by the

out overall projects. As a result, legal and

entire Supervisory Board.

operational risks are also increasing.
-

It is difficult to make accurate sales forecasts

One meeting was devoted almost entirely to

for large-scale projects and when new products

progress on the company’s strategy in general and

are launched on the market and so, on occasion,

that of certain market groups in particular. Nedap’s

the stock of components is sometimes too

operational and financial targets were discussed in

large and sometimes too small. The approach

this context. The market group leaders explained

to this is being tightened further as part of

their strategies at length. This helped to provide

Development Excellence, Support Excellence

us with good insight into the different markets,

and Operational Excellence, so that these risks

the competitive position of the various market

are being increasingly well managed.

groups, the development of the organisation, the
strategic objectives and the related conditions

The Board of Management made changes in various

and opportunities and threats of individual market

managerial positions, which are now held by people

groups and of Nedap as a whole.

who are able to bring about major development of
the market groups. Furthermore, greater attention

Risk management is an important part of good

will be given during the current financial year to

management and essential to securing Nedap’s

filling existing and future vacancies in key positions

continuity and so the various risks were discussed

at Nedap through both internal training and

in detail by the Supervisory Board and with the

external recruitment.

Board of Management. There are some significant
areas for attention relating specifically to Nedap:

During the year, the Supervisory Board addressed

-

One of the biggest risk factors for Nedap

recurring subjects such as the budget and periodic

is the ability to attract and retain the right

financial reports in which actual performance

staff. Nedap’s competitive strength is largely

is compared with the budget. The design and

determined by the talent, commitment and

effectiveness of the internal risk management

personal entrepreneurship of its employees.

system were discussed with the Board of

Accordingly, a lot of attention is devoted to

Management and the auditor. No major changes

the recruitment of new talent, the further

are anticipated in this respect. Partly in view of the

development of the existing talent within the

company’s limited size, we have decided together

organisation and the better utilisation of talent

with the Board of Management that Nedap does not

within Nedap. People Excellence, part of the

need an internal auditor.

long-term Road to Excellence programme,

5

delivered clear results during the past year.

Nedap is in close contact with its group companies

People Excellence will continue to require the

in the Netherlands and abroad. Almost all of them

organisation’s attention in 2014.

are managed from the market groups in Groenlo

Report of
the Supervisory Board

and they are often led by current or former

matter of course. Almost all of Nedap’s products

employees of Nedap N.V.

and services offer a solution to a socially relevant

Group Controlling in Groenlo monitors their risks.

problem. It would be inappropriate for Nedap to

Almost all group companies use the same ICT

link specific quantitative objectives to this as it

infrastructure as Nedap N.V.

would lead mainly to clerical work.

Once again in 2013, we closely monitored

We held meetings, some of which were not

economic developments and their possible

attended by the Board of Management, to discuss

consequences for Nedap in order to take prompt

our own performance and that of the Board of

action.

Management, both collectively and individually,
and the variable remuneration to be awarded to

As in previous years, the Supervisory Board,

the Board of Management. These discussions were

together with the Board of Management, evaluated

conducted in an open and critical manner. The

the audit firm and the auditor as well as the

working relationship between the Supervisory

co-operation with them. The Supervisory Board

Board and the Board of Management is a good one.

believes that the auditor provided it with all

Our conclusion is that the Supervisory Board and

relevant information to carry out its supervisory

the Board of Management have performed well

duties. The auditor found no irregularities in

individually and collectively.

the reporting. The Supervisory Board is satisfied
that the auditor is independent and that this

In addition to the scheduled meetings, we held two

independence is not at risk. The auditor performs

conference calls on filling the vacancy that arose on

no work for the company other than the annual

Ms Bahlmann’s resignation as a supervisory director

audit.

and on the Nedap Additional Participation Plan
(NAPP).

On 1 July 2013, Mr E.J.L. van Leeuwen took over the
Nedap audit from Mr G.J.M van Hengstum. As part

Outside of the meetings, individual members of

of the mandatory auditor rotation, the Supervisory

the Supervisory Board all made various visits to

Board and the Board of Management will explore

Nedap, partly in connection with their specific areas

the options for engaging another audit firm. KPMG

of responsibility. This fits in with the proactive

Accountants can in principle remain as Nedap’s

approach favoured by the Supervisory Board and its

auditor until the financial year 2016.

individual members.

One of the Supervisory Board’s meetings was held

The findings are reported back to the full

at the participating interest Nedap France S.A.S.

Supervisory Board. Discussions with employees of

in Paris. The director of this sales office provided

Nedap and its subsidiaries, including market group

insight into relevant developments in the market

leaders, directors of subsidiaries and the Works

segments that are important to Nedap France.

Council are important for us as a way to deepen our
connection with and insight into developments at

6

We discussed and approved Nedap’s corporate

Nedap. Nonetheless the good insights we gained

social responsibility policy, for which the Board of

in that way we have decided to further intensify

Management has final responsibility. Sustainable

informal contacts between the Supervisory Board

business practices are a major priority for Nedap

and the market group leaders and controllers to

and are embedded in our way of working as a

discuss not just financial performance but also

market trends and opportunities, the competitive

Membership of the Supervisory Board

position, staffing issues, the medium-term vision,

At the General Meeting of Shareholders on 16

risks and action points.

April 2013, we were compelled to bid farewell
to our vice-chairman, Dr J.P. Bahlmann. Much

In the past year, it became clear from the manner in

has happened in the sixteen years since her

which the Supervisory Board performed its duties

appointment on 29 May 1997 and Ms Bahlmann

that the Supervisory Board as a whole and its

has been an extremely committed supervisory

individual members were able to devote sufficient

director. During her term of office, the relationship

time and attention to the company’s affairs. There

between the supervisory directors, the Board

is a good distribution of areas of responsibility and

of Management and the business has moved

we complement each other sufficiently in our role

significantly towards more openness and

of advising the company.

transparency. Management changes demanded
great effort by the Supervisory Board and, in

Partly given Nedap’s limited size, the Supervisory

particular, its chairman and vice-chairman. Ms

Board continues to take the view that the creation

Bahlmann kept closely in touch in a constructive

of formal committees within the Board is neither

way with the company’s culture and strategy and

necessary nor desirable, particularly now that

this, along with her involvement, wide knowledge

the Supervisory Board has adopted a proactive

and experience, meant a lot to the Supervisory

approach based on special key areas. The full

Board. She was an excellent supervisory director

Supervisory Board is therefore designated to

and it was a great pleasure working with her. We

perform the duties of the Audit, Remuneration,

wish to thank her for her work and everything she

and Selection and Appointment Committees. Any

has done for the Supervisory Board and Nedap.

decisions are made jointly by the full Supervisory
Board.

The Supervisory Board and the Board of
Management met several times, both for scheduled

The chairman of the Supervisory Board and the

and unscheduled meetings, to discuss the

managing director are in regular contact to discuss

succession of Ms Bahlmann. The Supervisory Board

the company’s performance and any issues that

also discussed its composition when the Board of

require special attention. The bilateral contacts

Management was not present.

of the Supervisory Board with shareholders were
also discussed. The Board of Management and the

On the nomination of the Supervisory Board, the

Supervisory Board are committed to maintaining

General Meeting of Shareholders appointed

good relations with the company’s shareholders.

Dr J.M.L. van Engelen as a member of the

Both the company and shareholders can take the

Supervisory Board on account of his broad

initiative to get into contact with the other. The aim

management experience, wide-ranging expertise

of these discussions is to provide a more complete

in industrial product development, marketing

picture of developments within Nedap. These talks

and product strategy, financial expertise and his

are always based on information that has already

extended network at institutes of knowledge. We

been published. During the talks with shareholders,

are very pleased to welcome him as a member of

the company is represented by a member of the

the Supervisory Board.

Management Board.

7

Report of
the Supervisory Board

At the same shareholders’ meeting, Mr M.C.

size in the AEX small-cap index and the advisor’s

Westermann was reappointed on our nomination

own data. The advisor’s report confirmed that the

as a member of the Supervisory Board. Mr

Board of Management’s remuneration, especially

Westermann has wide management experience,

the long-term variable remuneration, was still well

an enterprising spirit, commercial focus, broad

below the median. After serious debate and using

expertise in ICT and a feeling for innovation.

the results of the survey, the Supervisory Board
drew up the proposal submitted to the General

The Supervisory Board believes it has a good

Meeting of Shareholders on 16 April 2013. The

balance of skills, relevant knowledge and

proposal was to change the variable income of the

experience and can fulfil its statutory duty to

Board of Management by increasing the payout for

supervise and advise the Board of Management

performance at target from 30% to 60% and the

in an effective manner. All members of the

related maximum of 50% of fixed annual income

Supervisory Board meet the requirements of the

to 90% and to end the existing 20% structural

Corporate Governance Code with respect to their

difference between the income of the CFO and that

independence (best practice provision III.2.1) and

of the CEO.

expertise.
These changes are consistent with Nedap’s
Remuneration

unique character and reflect developments at

Board of Management

other companies and in society more broadly.

The details of the remuneration policy for the

The General Meeting of Shareholders on 16 April

Board of Management are described in the

2013 agreed to the proposed changes in the

Corporate Governance section of this report. The

remuneration policy, bringing the remuneration of

composition of the remuneration is stated in the

the Board of Management into line with the market

financial statements under ‘Board of Management’s
remuneration’.

The targets for the variable part of the
remuneration of the members of the Board of

At the beginning of the reporting period, the

Management were determined in the reporting

Supervisory Board held a meeting with only

period. At least 50% of the variable remuneration

the remuneration policy and remuneration of

of the Board of Management has a long-term nature

the members of the Board of Management and

as its members have to invest 50% of their variable

Supervisory Board on the agenda. It was also

remuneration in the Nedap employee participation

attended by an independent advisor engaged by

plan, i.e. in depositary receipts which have a

the Supervisory Board who was first involved with

lock-up period of four years. Since the employee

the remuneration of the Board of Management

participation plan was set up, both members of the

and supervisory directors in 2009. At that

Board of Management have invested all of their

time, the remuneration level was set below the

variable remuneration in the plan.

median of a jointly defined benchmark. It was

8

agreed that the policy would be evaluated after

As part of the current remuneration policy, the

a few years and so we engaged the advisor to

Supervisory Board set the fixed annual income

again present a benchmark for the Board of

of the CEO at € 355,600 and that of the CFO at

Management’s remuneration. The benchmark

€ 271,500 from 1 January 2013. When setting

involved a comparison with a peer group of similar

the overall remuneration, the Supervisory Board

companies, a number of companies of similar

analysed various scenarios and took into account

such factors as the development of revenue and
profits, the advancement of Nedap’s interests in the
medium and long term and the need to ensure a
balanced remuneration structure within Nedap.
Supervisory directors
The remuneration of the Supervisory Directors
is set out in the financial statements under
‘Supervisory Board’s remuneration’. In view
of developments in the market and society,
including the heavier responsibilities and duties
of supervisory directors, a proposal was put to the
General Meeting of Shareholders on 16 April 2013
to set the annual remuneration of the supervisory
directors as follows:
Chairman: € 40,000;
Other supervisory directors: € 30,000.
This proposal was drawn up with the assistance of
an external advisor. The remuneration was adopted
by the shareholders as proposed.
Finally, we would like to express our appreciation
to the Board of Management and employees for
their involvement and efforts in the past year.
Thanks to their hard work and loyalty, Nedap has
created a sound basis for benefitting from future.
We would also like to thank the shareholders
for their interest in Nedap and their trust in the
company.
Groenlo, 11 February 2014
The Supervisory Board:
G.F. Kolff, chairman
M.C. Westermann, vice-chairman
J.M.L. van Engelen
D.W.J. Theyse

9

Report of
the Supervisory Board

Profile of the Supervisory Board

Details of the Supervisory Board

Nedap is a medium-sized company whose long-

At 11 February 2013

term policy aims to create sustainable added value
for customers, employees and shareholders through

G.F. Kolff (65), chairman, male

organic growth in revenue and profits, with a central

Wide management experience, in-depth knowledge

role for diversification and innovation based on the

of technology, financial expertise, ability to

company’s expertise.

translate technology into solutions and market
opportunities, experience with and understanding

The Supervisory Board has to take account of these

of Nedap’s ‘added value model’ and solid

basic principles when supervising the Board of

communication skills.

Management; it must also support the Board of
Management with advice.

Nationality

: Dutch

Profession/most

To this end, the Supervisory Board must have a

recent position

balanced membership combining management

Other relevant positions

: none

experience and wide-ranging knowledge in

Initial appointment

: 17 April 2012

the fields of finance, technology and industrial

Current term of office

: 2012-2016

marketing with an affinity and feeling for:

Supervisory Board memberships : Paques Holding B.V. (chairman)

– entrepreneurship;

– hands-on management in a flat organisation

D.W.J. Theyse (45), female

: CEO of Shtandart TT B.V.

Smits Bouwgroep B.V. (SBB)

which is based on distinctiveness;
– an organisation in which sales, development
and production operate as one unit;
– working methods that focus on responsibility;

Thorough financial knowledge, management
experience and up-to-date and practical knowledge
and experience with listed companies and the
related regulatory environment.

– a creative process of innovation;
– developments in society.

: Dutch
: F. van Lanschot Bankiers N.V.

In general, the Supervisory Board should adopt a

Head of Corporate Banking

critical attitude towards the Board of Management.

Property

Its members must be independent of the company

Other relevant positions

: none

and of each other and display complementary

Initial appointment

: 29 April 2010

qualities. The Supervisory Board aims for a mixed

Current term of office

: 2010-2014

membership that reflects the society in which

Supervisory Board memberships : none

Nedap operates.
The Board will not structurally have more than five
members.

at the Faculty of Industrial
Design Engineering of the Delft
University of Technology
Member of the Advisory Board
of the Research School ICS
(Interuniversity Center for
Social Science Theory and
Methodology)
Initial appointment

solvency ratio at the end of the year amounted to
41.0% (year-end 2012: 39.2%).

27

Report of the Board of
Management

This Nedap-wide portfolio of knowledge and
experience offers market groups a solid foundation
for building their market-specific propositions.
The cross-fertilisation between the market groups
leads to a strong acceleration in the translation
of technological and market opportunities into
concrete commercial results, an essential part of
our competitive strength.
Thanks to our investments in innovation and
commerce, the distinctiveness of our propositions
has increased further in the past years and we have
reinforced our positions in our diverse markets.
On the strength of all these efforts, we can look
to the future with confidence and foresee healthy
growth in the longer term. Our expectation for 2014
is that â&#x20AC;&#x201C; barring unforeseen circumstances â&#x20AC;&#x201C; Nedap
will achieve further revenue growth.

than 3% of revenue (2012: 2%). Net transactions in
other currencies were no more than 1% each.

Segmentation
Nedap’s long-term policy focuses on creating

Interest rate risk

solutions with sustainable meaning for customers,

A change of 100 basis points in interest rates would

employees and shareholders. It wishes to achieve

affect the profit for the financial year by € 0.3

this through organic growth in revenue and profit

million (2012: € 0.3 million).

based on a culture oriented on the expertise,
creativity and entrepreneurialism that the company

Capital management

has built up in the past decades.

To remain doing business in a way that strengthens
it, Nedap uses an operating profit of at least 10%

Achieving this objective not only requires know-

of revenue and a return on equity of 15%-20%

how of technology and market conditions but an

as financial standards. The innovative nature of

increasing degree of knowledge of the customer’s

the group and often project-oriented nature of its

business processes and applications that our

orders, means a solvency ratio of about 45%, based

solution finally goes into. The focus of activities on

on organic growth, and not counting dividends

a customer or group of customers (market group)

payable and non-controlling interests in equity, is

is a significant condition for creating a genuinely

desirable.

distinctive position in the market and sustainable
solutions for our customers and their users, and
thus also having sustainable meaning for our
employees and shareholders.

41

Financial statements

The technologies used for solutions are closely

assessment and does not believe that the new

related and the market groups make a lot of use

standard affects the treatment of Nedap France

of each other’s technological know-how, products,

S.A.S., where it does not have control. A further

systems, production resources and market and user

assessment will be performed in 2014.

experience. This applies for all of Nedap’s activities
and market groups. This exchange of know-how

IFRS 11 addresses the treatment of ‘joint

and resources, without financial settlement, is an

arrangements’ relating to participating interests.

ongoing and informal process and, therefore, a vital

Nedap does not believe that this amended standard

part of the entrepreneurial culture.

will affect its financial statements.

IFRS 8 requires the financial statements to present

The possible effect of other standards and

segment information that is in accordance with

interpretations on Nedap’s financial statements is

the internal information used by the directors to

regarded as limited. The changes to disclosures in

assess performance and allocate resources. Nedap’s

the financial statements arising from amendments

Board of Management assesses the company’s

to other standards, which are expected to be minor,

overall result and the performance of the market

will be assessed in 2014.

groups mainly on the basis of its own observations,
day-to-day communications with the market groups
and development and market prospects. Decisions
are taken, staff are deployed and resources are
allocated on this basis. This is non-financial
information. Nedap does not have separate
segments as meant by IFRS 8. The geographical
distribution of property, plant and equipment,
intangible assets and revenues and the breakdown
of revenues into categories are disclosed in the
financial statements as required by IFRS 8.
New standards and interpretations not yet adopted
A number of new standards and amendments to
standards and interpretations only came into force
after 1 January 2013. They have not been applied
in these consolidated financial statements. The
standards relevant to Nedap are explained below.
As in prior years, Nedap has not adopted these
standards early.
IFRS 10 introduces a new approach to determining
whether associates (for Nedap, the French
participating interest Nedap France S.A.S.) have
to be consolidated, by reference to a uniform
model for ascertaining if control is exercised
over an associate. Nedap has performed an initial

*moulds, dies, measuring and testing equipment, furniture and fittings, computer systems and vehicles.
Foreign currency translation gains and losses are ignored, given their small amount.
Property, plant and equipment are insured at new-for-old value.
A mortgage of € 20.0 million (2012: € 20.2 million) has been granted on immovable property as security for all amounts owed
to the bank.
The land covers a total area of 68,000 m2, of which about 5,000 m2 is still available for building.
Obligations entered into at the end of the financial year were € 0.2 million (2012: € 0.8 million).
44

Geographical information on the carrying amount of property, plant and equipment and intangible assets:

net asset value at 1 January
profit after taxes
dividend received
other movements

2013

2012

2,425
2,871
723
584
–/– 249 –/– 1,143
62
113
2,961

2,425

23,687
22,233
1,454
14,325
8,367

22,846
21,668
1,178
14,837
9,957

8,379

8,448

2013

2012

341
90

–
341

251

341

net asset value at 31 December
Key figures of the associate,
on 100% basis
revenue
expenses
profit after taxes
total assets at 31 December
total liabilities at 31 December
Transactions with associate:
sales of goods and services
to associate

3. Loans

balance at 1 January
movements

–/–

balance at 31 December
The loans have been granted to business partners.

45

Financial statements
4. Deferred tax assets

2013

2012

balance at 1 January
movements

481
390 –/–

489
8

balance at 31 December

871

481

These are assets of a number of subsidiaries and relate to loss relief and temporary differences between the carrying
amounts and tax bases of assets and liabilities. Certain losses can be carried forward indefinitely and others for 15 years.
At 31 December 2013, there were no temporary differences, unrelieved tax losses or unused tax credits available for which
no deferred tax assets had been recognised.

5 Inventories
2013

2012

raw materials and components
work in progress
finished goods

9,483
1,236
15,092

10,266
1,274
15,270

total

25,811

26,810

2013

2012

trade receivables
amounts owed by associate
other receivables, prepayments
and accrued income

27,573
1,760

28,669
2,546

4,934

4,798

total

34,267

36,013

6. Trade and other receivables

€ 0.3 million of the trade and other receivables had a term of more than one year (2012: € 0.3 million).

Movements in provision for trade receivables that are deemed uncollectible:

balance at 1 January
withdrawals
additions
balance at 31 December

46

–/–

2013

2012

174
5 –/–
–

118
41
97

169

174

The average credit term for trade receivables was 8 weeks in 2013 (2012: 7 weeks).
Where possible, Nedap insures the credit risk in its receivables, with a payout of 90% (2012: 90%). Please see the Financial
Risk Management section for a risk assessment.

The fair value of the borrowings is not materially different from their amortised cost.
The financing agreement with the bank for the Standby roll-over loan expires on 1 November 2015
and does not contain any covenants. Security is in the form of a mortgage and a pledge of trade receivables.

47

Financial statements
10. Derivative financial instruments
The risk of interest rate fluctuations on part of the borrowings (€ 1.9 million) has been hedged using interest rate swaps,
which are recognised at fair value. Valuation gains and losses are recognised in the income statement in net financing
expenses. At 31 December 2013 the weighted average maturity of the derivative financial instruments was 5 years. The
weighted average effective interest rate was 4.2%.

Costs recognised as social security charges
in the income statement:
service costs
interest costs on obligations
expected return on plan assets

2,750
2,049
3,042
3,000
–/– 2,626 –/– 2,983
3,166

total

2,066

Differences between the estimated and actual movements and changes in assumptions are recognised directly in other
comprehensive income.
lower/(–/–)higher return
on plan assets
actuarial loss arising from
financial assumptions
experience adjustment

Principal actuarial assumptions for measuring the pension plan at the reporting date:

discount rate for pension entitlements at 31 December
expected return on plan assets
annual salary increase for indexation of entitlements
annual increase for built-in offset
pay rises for promotion on top of the indexation

2013

2012

3.60%
3.60%
2.00%
2.00%
1.50%

3.70%
3.70%
2.00%
2.00%
1.50%

Certain other actuarial assumptions are used, including the Generatietafel 2014 (-1/-1) (2012:
Generatietafel 2013 (-1/-1)).
A change of 0.5% in the discount rate is expected to affect the present value of the obligations by about 10%.
A change of 0.5% in salary increases is expected to affect the present value of the obligations by about 4%.

49

Financial statements
No more than 25% of the assets are invested in equities; the remainder is in fixed-income securities.
In consultation with the pension administrator, which guarantees the pension obligations, the fixed-income portfolio is
made up of units in fixed-income investment funds of a company associated with the pension administrator. The choice of
funds depends on the duration of the obligations. Investment in equities is through units in funds of the same company
associated with the pension administrator. These funds are non-listed.
The actual return on the plan assets was -2.6% (2012: 11.5%).
The agreement with the pension administrator expires at the end of 2014 and incorporates surplus interest sharing and a
full distribution of the actuarial gains and losses. The pension administrator continues to be a guarantor for the pension
benefits.
Nedap expects to pay contributions of € 4.2 million in 2014.

12. Employee benefits, other
This is a provision for early retirement entitlements.

2013

2012

total present value of obligations
of which, of a current nature

285
285

804
540

Movements in obligations:
balance at 1 January
service costs and interest
benefits paid
balance at 31 December

–/–

804
1,588
54
83
573 –/– 867
285

804

Service costs and interest are included in the income statement

Historical information:

2013

2012

2011

2010

present value of the obligations

285

804

1,588

2,320

Principal actuarial assumptions at the reporting date:

discount rate for early retirement
entitlements at 31 December
annual salary increase for indexation of entitlements
Nedap expects to pay € 0.3 million in benefits in 2014.

Guarantees issued by group companies in relation to building rental were € 0.1 million (2012: € 0.1 million)
and other guarantees were € 0.2 million (2012: € 0.3 million).

52

Nedap leases various business premises. The leases usually have a term of 5 years with a renewal option. Rents are revised
annually. There is also a leasing, maintenance and management contract for hardware and software, which expires at the end of
2017. The costs are fixed per user for the full period of the contract. Three group companies lease their vehicles.
During the year, € 2.1 million (2012 € 2.3 million) was recognised for operating leases in the income statement.
Some customers have submitted claims in respect of what they argue is Nedap’s non-compliance with contractual obligations.
Nedap believes that it has met the requirements and will respond appropriately. Nedap does not expect the claims to have
financial consequences.

Related parties
Nedap’s related parties are the associate, Nedap France S.A.S., Stichting Preferente Aandelen Nedap and the members
of the Supervisory Board and the Board of Management. There were no transactions with related parties during the year
under review except as presented in the financial statements. Transactions are on arm’s length terms.

The Board of Management’s remuneration excludes the non-recurring 16% crisis levy for which an additional
€ 54 is due to be paid to the tax authorities for Mr Wegman and € 40 for Mr Ezendam.
Details of the remuneration policy are set out in the Corporate Governance section.
On 31 December 2013, Mr Wegman held 10,853 depositary receipts for shares in the company (2012: 8,114)
and Mr Ezendam held 8,669 (2012: 6,478).
54

Notes to the financial statements of Nedap N.V.
(â&#x201A;Ź x 1,000, unless stated otherwise)
Accounting policies
Pursuant to Section 362(8) of Book 2 of the Netherlands Civil
Code, Nedap makes use of the option to prepare company
financial statements in accordance with the accounting
policies used for the consolidated financial statements and
in accordance with Part 9 of Book 2 of the Netherlands Civil
Code. By using this option, the reconciliation between the
consolidated equity and the equity in the company financial
statements is maintained.
Use is made of the option pursuant to Section 402 of Book 2
of the Netherlands Civil Code to publish an abridged separate
company income statement.
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union. Please see the
notes on the accounting policies for the consolidated
financial statements for a description of the accounting
policies relating to these standards.
Financial assets include the Nedap groupâ&#x20AC;&#x2122;s subsidiaries and
associates where significant influence can be exercised
over the commercial and financial policy. The subsidiaries
and associates are recognised using the equity method
established using the accounting policies in the consolidated
financial statements. Associates with an equity deficit are
carried at nil. The equity deficit is deducted from amounts
receivable from these associates. The equity of subsidiaries is
increased by the value of loans granted to them measured at
amortised cost.

Property, plant and equipment are insured at new-for-old value.
A mortgage of € 16.4 million (2012: € 16.4 million) has been granted on immovable property as security for all amounts owed
to the bank.
The land covers a total area of 61,000 m2, of which about 5,000 m2 is still available for building.
Obligations entered into at the end of the financial year were € 0.2 million (2012: € 0.6 million).

The plan assets consist of:
equities
fixed-income securities
current account
Movements in obligations:
balance at 1 January
service costs
interest
benefits paid
contributions paid by members
actuarial gains and losses
balance at 31 December

63

Financial statements
Historical information:

fair value of plan assets
present value of obligations
surplus or deficit (–/–) in the fund

2013

2012

2011

2010

74,550
79,963

75,016
73,954

66,945
61,060

54,223
50,007

–/– 5,413

1,062

5,885

4,216

Please see the notes to the consolidated financial statements for the principal actuarial assumptions for measuring
the pension plan.

Employee benefits, other
Please see the notes to the consolidated financial statements.

Movements in deferred tax liabilities:
balance at 1 January
taken to the profit (net)
taken to other comprehensive income
balance at 31 December

4,456
4,728
–/– 525
666
–/– 1,719 –/– 938
2,212

4,456

The deferred tax liabilities have a predominantly long-term nature.

Warranty provision

balance at 1 January
withdrawals
additions
balance at 31 December

2013

2012

557
–/– 1,445
1,512

688
–/– 1,366
1,235

624

557

The warranty provision has a predominantly short-term nature.

9. Non-current liabilities

borrowings

65

2013

2012

14,000

14,000

Financial statements
Borrowings
This is a credit facility with a ceiling of € 14.0 million ending on 1 November 2015, under which amounts of at least
€ 0.5 million can be withdrawn for a term of no less than 1 month and no more than 12 months.
The interest rate is Euribor plus 2.6%.

10. Current liabilities
2013

2012

bank overdrafts
taxes and social security charges
trade and other payables,
accruals and deferred income

18,457
2,552

13,649
1,725

10,591

11,711

total

31,600

27,085

€ 0.5 million of the trade and other payables had a term longer than one year (2012: € 0.5 million).

Bank overdrafts
The maximum current account overdraft under the facility is € 25 million (2012: € 25 million).

Trade and other payables

trade payables
liabilities on account of investments
prepayments
other payables, accruals and deferred income
total

66

2013

2012

2,668
236
849
6,838

3,641
316
894
6,860

10,591

11,711

Off-balance sheet obligations
Bank guarantees of â&#x201A;Ź 1.7 million have been issued for group companies.
Nedap N.V. and Inventi B.V. form a fiscal unity for corporate income tax purposes and so each company is jointly and severally
liable for the payment of the corporate income tax due.
Nedap N.V. has assumed joint and several liability for the debts arising from the juristic acts of Inventi B.V.
pursuant to Section 403 of Book 2 of the Netherlands Civil Code.

Audit fees
This item relates to the total fee for services provided by KPMG Accountants N.V.

Statement pursuant to Section 5:25c(2c) of the Financial Supervision Act

To the best of our knowledge,
1 the financial statements (including the Other
information pursuant to Section 392 of Book 2 of the
Netherlands Civil Code) give a true and fair view of
the assets, liabilities, financial position and profit or
loss of Nedap N.V. and the undertakings included in
the consolidation taken as a whole; and
2 the report of the Board of Management includes a
fair review of the position at 31 December 2013 and
the development and performance of the business
during the financial year 2013 of Nedap N.V. and the
undertakings included in the consolidation taken as a
whole and the 2013 report describes the risks facing
Nedap N.V.

accountants” (ViO) and have fulfilled our other
responsibilities under those ethical requirements.

Opinion with respect to the company financial

We believe that the audit evidence we have

statements

obtained is sufficient and appropriate to provide a

In our opinion, the company financial statements

basis for our opinion.

give a true and fair view of the financial position of
N.V. Nederlandsche Apparatenfabriek “Nedap” as

Key audit matters

at 31 December 2013 and of its result for the year

Key audit matters are those matters that, in our

then ended in accordance with Part 9 of Book 2 of

professional judgment, were of most significance

the Netherlands Civil Code.

in our audit of the financial statements. Key
audit matters are selected from the matters

Our engagement

communicated with the Board of Management

We have audited the 2013 financial statements

and the Supervisory Board but are not intended

of N.V. Nederlandsche Apparatenfabriek “Nedap”,

to represent all matters that were discussed with

Groenlo (“the Company”). The financial statements

them.

include the consolidated financial statements and
the company financial statements. The consolidated

Our audit procedures relating to these matters were

financial statements comprise the consolidated

designed in the context of our audit of the financial

balance sheet as at 31 December 2013, the

statements as a whole. Our opinion on the financial

consolidated income statement, the consolidated

statements is not modified with respect to any of

statement of comprehensive income, the

the key audit matters described below and we do

consolidated statement of changes in equity, the

not express an opinion on these individual matters.

consolidated cash flow statement and the notes,
comprising a summary of significant accounting

Sensitivities with respect to the valuation of

policies and other explanatory information. The

intangible assets

company financial statements comprise the

The valuation of intangible assets was significant

company balance sheet as at 31 December 2013,

to our audit as it requires estimates that are to

the company income statement and the notes,

some extent complex and subjective and based on

comprising a summary of the accounting policies

assumptions. Assessing the valuation of intangible

and other explanatory information.

assets at the reporting date requires some extent of
professional judgement, in particular on the issue
of whether the criteria for capitalisation have been

70

met (see the accounting policies for intangible

concern basis of accounting when preparing the

assets in the financial statements for details of

financial statements.

these criteria) and to estimate the recovery period
and related amortisation method. Some 40% of

The Board of Management has not identified a

the carrying amount of capitalised development

material uncertainty that may cast significant doubt

projects relates to Energy Systems.

on the Company’s ability to continue as a going
concern and accordingly none is disclosed in the

We assessed the process that the Company uses to

financial statements. Based on our audit of the

determine which development projects qualify for

financial statements, we also have not identified

capitalisation. We assessed the internal controls for

such a material uncertainty. However, neither

capitalised development projects with a significant

the Board of Management nor the auditor can

carrying amount, discussed with staff in the market

guarantee the Company’s ability to continue as a

groups and performed audit procedures on capital

going concern.

expenditure and amortisation. We also evaluated
management’s assessment of the capitalisation

Responsibilities of the Board of Management and

criteria and estimates of recoverability, amongst

the Supervisory Board for the financial statements

others based in part on budgets, business cases,

The Board of Management is responsible for

historical data and information and interviews

the preparation and fair presentation of these

with the staff referred to above and the Board of

financial statements in accordance with EU-IFRS

Management.

and with Part 9 of Book 2 of the Netherlands
Civil Code and for the preparation of the annual

Scope of our group audit

report in accordance with Part 9 of Book 2 of the

We planned our audit using a risk-based approach.

Netherlands Civil Code. The Board of Management

We considered both qualitative and quantitative

is also responsible for such internal control as it

factors when selecting the individual group entities

determines is necessary to enable the preparation

and associates where we request local auditors

of financial statements that are free from material

to perform audit procedures for us. The group

misstatement, whether due to fraud or error. The

audit team evaluates the local auditors’ planning,

Supervisory Board is responsible for overseeing the

findings and conclusions to establish whether

Company’s financial reporting process.

we can rely on their work. In addition, we have
a rotating programme of site visits to assess the

Our responsibility for the audit of the financial

quality of the local audits as support for our ability

statements

to rely on the work of the local auditors.

The objectives of our audit are to obtain reasonable
assurance about whether the financial statements

71

Going concern

as a whole are free from material misstatement,

The Company’s financial statements have been

whether due to fraud or error, and to issue

prepared on the going concern basis of accounting.

an auditor’s report that includes our opinion.

The use of this basis of accounting is appropriate

Reasonable assurance is a high level of assurance,

unless the Board of Management either intends

but is not a guarantee, that an audit conducted in

to liquidate the Company or cease operations or

accordance with Dutch Standards on Auditing will

has no realistic alternative but to do so. As part of

always detect a material misstatement when it

our audit of the financial statements, we concur

exists. Misstatements can arise from fraud or error

with the Board of Management’s use of the going

and are considered material if, individually or in

Other Information

Provisions of the Articles of Association concerning the appropriation of
profit in accordance with Article 45

aggregate, they could reasonably be expected to

the planned scope and timing of the audit and

influence the economic decisions of users taken on

significant audit findings, including any significant

the basis of these financial statements.

deficiencies in internal control, that we identify

As part of an audit in accordance with Dutch

during our audit.

Standards on Auditing, we exercise professional

We are also required to provide the Supervisory

judgement and maintain professional scepticism

Board with a statement that we have complied

throughout the planning and performance of the

with relevant ethical requirements regarding

audit. We also:

independence and to communicate to it

• identify and assess the risks of material

all relationships and other matters that

misstatement of the financial statements, whether

may reasonably be thought to bear on our

due to fraud or error, design and perform audit

independence and, where applicable, related

procedures responsive to those risks and obtain

safeguards.

audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not

Report on the annual report and other information

detecting a material misstatement resulting from

Pursuant to the legal requirements in Part 9 of

fraud is higher than for one resulting from error,

Book 2 of the Netherlands Civil Code regarding our

as fraud may involve collusion, forgery, intentional

responsibility to report on the annual report and

omissions, misrepresentations or the override of

the other information:

internal control.

• we have no deficiencies to report as a result

• obtain an understanding of internal control

of our examination of whether the annual report,

relevant to the audit in order to design

to the extent we can assess, has been prepared in

audit procedures that are appropriate in the

accordance with Part 9 of Book 2 of this Code and

circumstances but not for the purpose of expressing

whether the other information as required by Part 9

an opinion on the effectiveness of the Company’s

of Book 2 has been annexed.

internal control.

• we report that the annual report, to the extent

• evaluate the appropriateness of accounting

we can assess, is consistent with the financial

policies used and the reasonableness of accounting

statements.

estimates and related disclosures made by the
Board of Management.
• evaluate the overall presentation, structure and
content of the financial statements, including the

11 February 2014

disclosures, and whether the financial statements
represent the underlying transactions and events in

KPMG Accountants N.V.

a manner that achieves a true and fair view.
• obtain sufficient appropriate audit evidence
regarding the financial information of the company
and business activities within the company to
express an opinion on the financial statements.
We are responsible for the direction, supervision
and performance of the audit. We remain solely
responsible for our audit opinion.
We are required to communicate with the
Supervisory Board regarding, among other matters,

72

E.J.L. van Leeuwen

Paragraph 1:

Appropriation of profit

The portion of profit - the positive balance in the

â&#x201A;Ź x 1,000

income statement - to be allocated to the reserves
shall be determined each year by the Board of

Profit attributable to shareholders

9,792

Management and the Supervisory Board.

Other reserves

2,430

Paragraph 2:

Dividend payable

A dividend shall be paid on the preference shares

on the ordinary shares

7,362

from the profit remaining after the allocation to the
reserves as referred to in the previous paragraph,

Branches

equivalent to a percentage equal to the sum of

Naamloze vennootschap 'Nederlandsche

the weighted averages of the deposit interest

Apparatenfabriek Nedap', Vilvoorde, Belgium

rate of the European Central Bank - weighted

(trading name: Nedap BelgiĂŤ).

by the number of days for which the dividend is
paid - plus three per cent (3%). The dividend on
preference shares shall be calculated on the
paid-up portion of the nominal amount. If, in any
year, the profit is insufficient to pay the dividend on
the preference shares pursuant to the first sentence
of this clause, the shortfall shall as far as possible
be paid out of the freely distributable portion of
equity.
Paragraph 3:
Any remaining profit shall be distributed as a
dividend on ordinary shares.
Paragraph 5:
If a loss is incurred in any year, no dividend shall
be distributed for that year. Dividends may not be
distributed in subsequent years until the loss has
been extinguished by profits. The General Meeting
may however resolve, upon a joint proposal of the
Supervisory Board and the Board of Management,
to extinguish such a loss by charging it to the
distributable part of equity.

the company’s expertise, playing a central role.
Diversification into different market segments not

The company is organised into market groups.

only opens up new growth opportunities, but also

Each group develops and delivers solutions and

makes the company less dependent on economic

possesses knowledge in the fields of technology,

trends within a single market. Innovation is the basis

markets and customer business processes. Staff

for delivering added value to the customer: the

are challenged to display entrepreneurship, take

customer’s perception of what the solution is worth

responsibility and develop their talents.

in comparison with what competitors offer. Nedap
consequently presents itself in a distinct manner

The technologies used for the various solutions

within the various markets.

are closely related so that the market groups use
and share each other’s technological know-how,

The distinctive strength of the solutions offered

products, systems and market experience.

by Nedap enables the company to occupy its own
place in a given market and ensures that it need

Particular attention is devoted to creating distinctive

not compete exclusively on the basis of price.

value in the products and systems to be sold, as well

The added value per employee indicates the

as the associated services. The professionalisation

extent to which customers accept the distinctive

and internationalisation of sales are also high

strength of Nedap’s solutions and thus reflects the

priorities.

inventiveness and effectiveness of the organisation.
Growth in added value (revenue minus materials)

The main sales market is still Europe, but sales

and added value per employee are therefore key

outside Europe, including the United States and

priorities.

Asia, are developing.
Responsibilities

78

To continue operating in a manner that makes

A special attitude must be embedded throughout

Nedap strong, it pursues an operating profit of at

the entire organisation in order to sustain

least 10% of revenue and a return on equity of

the company’s unique character and policy.

15%-20% as financial norms. The dividend policy,

Diversification and innovation are delicate processes

which results from the financial policy, is to pay out

where premature action can be just as harmful as

late intervention. For the staff this means being

fluctuations in revenue will generate more than

receptive to new responsibilities and working

proportionate percentage variances in the result.

methods and feeling comfortable in a constant

New products and systems and the project-based

process of change. For the Board of Management

nature of the revenue, combined with relatively

this means pursuing entrepreneurship, seeing new

short project lead and delivery times, make it

developments in the market and technology and

difficult to estimate future revenue.

making sure that innovation is realised.
Various internal and external factors can also have
For the Supervisory Board this means stimulating

both a negative and positive impact on revenue.

the Board of Management in this innovation process

Important factors in this respect are delays during

and carrying out adequate supervision while giving

technical and/or market development, start-up

the Board of Management sufficient scope for

problems with new products, intensified price

responsible entrepreneurship. The chosen policy

competition, exchange rates (mainly the US

requires excellent relations among the Supervisory

dollar), government decisions and macroeconomic

Board, the Board of Management and staff in order

developments. However, Nedap has a broad

to ensure that new product ideas and marketing

product portfolio. It has developed products for

strategies can be discussed at an early stage and

highly diverse markets, including retail, healthcare,

that successes and setbacks are promptly and

energy, livestock farming, libraries, access control,

frankly evaluated, without leading to a blurring of

water treatment and lighting. The diversification

responsibilities. In this respect, Nedap has put in

policy makes Nedap less sensitive to economic

place a working environment in which the various

developments in one market.

elements of ‘governance’ are mutually reinforcing.
The markets in which Nedap is active are set
Risk and Risk Management

to undergo radical change in the coming years

Risks are an integral part of entrepreneurship. The

under the impact of increasing transparency and

trick is to limit these risks as far as possible without

convergence. The markets will be larger in scale,

impeding the company’s entrepreneurial drive.

more international in character and more fiercely

The ‘Management System’ at Nedap, as described

competitive. New online applications in particular

elsewhere in this report, forms the procedural basis

are leading to improved transparency, which makes

for identifying risks as early as possible and taking

it easier for customers to compare competing

measures where necessary. The Controlling Groenlo

propositions around the world. At the same time,

Department plays a leading role in this respect. The

the introduction of new technologies means that

risks at Nedap can be broadly divided into risks that

existing products can abruptly become less relevant.

are inherent in entrepreneurship and risks that arise
from breaches of company or social standards and

New product developments can also be adopted

regulations, such as fraud.

at lightning speed by markets all over the world.
Initial imperfections in products can therefore lead

Entrepreneurial risks

to larger losses for, and corresponding claims from,

Revenue and expenses

end users. Nedap takes great care to guarantee the

Nedap’s entrepreneurial and project-based nature

quality and safety of its products, using standards

means that its revenue varies annually. Due to

that are partly based on laws and regulations as well

the high added value (in percentage terms) of the

as test and control systems.

company’s revenue (revenue minus materials),

79

Corporate Governance

But it is not only technic al risks that are increasing.

offers the company scope for making the most

The much larger scale of projects, many of which

sensible strategic decisions for its long-term future.

are implemented at locations around the world, is
also giving rise to much greater project, certification

Staff

and legal risks. Managing these risks will become

Nedap’s competitive strength derives largely from

increasingly important in the future and will

the talent, dedicated efforts and enterprising spirit

consistently be taken on board as an integral part of

of our staff. One of the largest risk factors for Nedap

the development of new propositions.

therefore remains the ability to attract and retain
the right people. Accordingly, a lot of attention is

Delays during the technical and/or market

devoted to the recruitment of new talent, the further

development of new products can also lead to

development of the talent that is already available

substantially higher costs. As external increases in

within the organisation and the better utilisation of

raw material and commodity costs cannot always

talent.

be recharged to customers, margins can come
under pressure. Rapid economic obsolescence of

The value of defined benefit pension entitlements

components, the abortion of product launches and

is calculated according to IFRS reporting rules. The

the sooner-than-expected ending of product life

calculations are based on capital market interest

cycles can necessitate substantial write-downs on

rates and can therefore show strong annual

inventories. Nedap’s Road to Excellence programme

fluctuations. The resulting gains or losses must be

was partly set up to mitigate these risks.

taken directly to equity. This increases the volatility
of solvency. Nedap’s actual pension obligation,

Risks arising from customer insolvency are reduced

however, remains limited to the payment of the

wherever possible with credit insurance. Controlling

annual contributions and single premiums.

in Groenlo continuously monitors the currency
markets and assesses to what extent currency risks

Financial performance

can and must be hedged in specific situations.

To maintain the entrepreneurial drive that makes
Nedap strong, the company’s financial objectives

Besides making many markets more fiercely

are an operating profit of at least 10% of revenue

competitive, the aforementioned changes are also

and a return on equity of 15% to 20%. In view

spurring a radical realignment of market positions.

of Nedap’s innovative character and the largely

The gap between winners and losers will also

project-based nature of its work, a solvency ratio of

widen in this uncompromising struggle for new

about 45% (disregarding IAS 19), based on organic

market positions. The losers who fail to keep up

growth, is considered desirable. Dividend payable is

with developments can see their markets vanish

not included in equity. The operating profit for 2013

overnight, while the winners will be confronted with

amounted to 6.8%, the return on equity was 21.2%

surging demand that will need to be effectively

and the solvency ratio stood at 41.0%. Nedap

managed.

expects to achieve the set objectives in the medium
term.

In the coming years, therefore, Nedap must continue
investing in the quality of its propositions and in the
scalability of its organisation in order to respond
adequately to the growing demand for its products
and services. Nedap’s solid financial policy also

80

The risks attaching to the use of financial

in Groenlo. The management consists of (former)

instruments are described in the section on financial

employees of Nedap N.V. Controlling in Groenlo also

risk management in the financial statements. The

monitors the risks relating to the group companies.

financing agreement with the bank contains no

These group companies make use of the central ICT

covenants. No specific reports are submitted to the

infrastructure.

bank.
The Dutch group company Nsecure B.V. in
The added value of revenue is largely created in

Barendrecht and the 49.7% equity interest in Nedap

the Netherlands. The income tax expense therefore

France S.A.S operate virtually independently. Nedap

largely consists of Dutch corporate income tax.

Iberia S.A., which undertakes activities in Spain and
Portugal, operates under Spanish management but

Corporate culture

works closely together with the market groups in

Nedapâ&#x20AC;&#x2122;s policy is targeted at organic growth, which

Groenlo.

is subject to fewer risks than acquisition-driven
growth.

Risks arising from breaches of company or social
standards and regulations, such as fraud

The informal, enterprising corporate culture is one

Apart from social control, managers play an

of the key mainstays of the success of the Nedap

important role in preventing fraud and other forms

organisation, but it also heightens the risks inherent

of inappropriate behaviour at Nedap. They must

in doing business. The daily direct contacts of the

set the right example and, through â&#x20AC;&#x2DC;hands onâ&#x20AC;&#x2122;

Board of Management and the Controlling with

management, promote awareness of what is and

managers and employees in Groenlo limit these

what is not tolerated. In addition, the Controlling

risks. It is imperative that employees are aware of

Groenlo Department continuously assesses and

the risks and also articulate and discuss these risks

monitors the administrative organisations and

amongst one another. After all, awareness of risks

internal measures of control, devoting extensive

is the first step towards managing them. A careful

attention to the prevention of fraud. During the

consideration of all risks must automatically form

annual audit, the external auditors discuss the

part of information flows and decision-making.

internal control measures aimed at preventing
and detecting fraud with various officers in the

Members of the Board of Management and

organisation and with the Supervisory Board.

Supervisory Board as well as other managers
should set an example, as this will encourage

Nedap ensures that its intellectual property is

others to follow the same high standards. They

protected wherever possible, such as with patents.

must create a culture where full justice is done to

This provides no guarantee, however, that third

risk management. The actions and behaviour of

parties (are able to) infringe its rights. Any such

Nedap and its employees must be characterised by

infringements can lead to substantial losses. In

integrity at all times. This integrity is not based on

addition, Nedap takes measures to ensure that it

all manner of formal rules, but on what every normal

does not infringe the rights of third parties itself.

person knows to be right or wrong.
Close contact is also maintained with the group
companies at home and abroad. Nearly all group
companies are controlled from the market groups

81

Corporate Governance

Social aspects of doing business

in the Netherlands, partly with a view to retaining
employment.

Nedapâ&#x20AC;&#x2122;s culture

We work closely with a sheltered employment

Corporate social responsibility, or sustainable

service so we can offer people with work limitations

business, is a natural part of Nedap and rooted in

a meaningful working environment.

its corporate culture. It is also part of our corporate
objective: to develop and supply innovative and

Sustainability is not just about manufacturing

sustainable security and electronic control solutions

sustainable products, but involves the search for

as well as automation, management and information

new, inventive production methods and the design

systems for organisations. Sustainable business is

of the related processes. Social responsibility in

therefore anchored in all our business processes.

purchasing is also important. We therefore also
consider the environmental and social aspects

Every business decision involves weighing up the

of products and components we purchase.

interests of the various stakeholders. For many

Environmental aspects have to do with the impact

years, the search for a balance between financial

of the item or the production process on the

results, social interests and the environment has

environment; social aspects include respect for

been embedded in our way of working as a matter

human rights and employment rights.

of course. Sustainable business is an ongoing

We obey the law in the countries where we operate,

process, not an end in itself.

support universal human rights and apply high
health, safety and environmental standards.

Nedap does not have a hierarchical structure and
helps its people develop a broad, interested view of

Healthy commercial results

the world.

A healthy financial situation is a precondition for

We encourage them to ask questions. We can often

the company’s continuity. To ensure that Nedap can

find a different, better way if we challenge ourselves

continue doing business in a way that fosters our

and our customers to look at things from more than

strength, we use an operating profit of at least 10%

one perspective.

of revenue and a return on equity of 15%-20% as
financial standards. Given the innovative nature of

Nedap and society are inextricably linked; one

Nedap as a whole and the often project-oriented

influences the other. A number of important aspects

nature of its orders, we consider it desirable to

of this are mentioned below.

maintain a solvency ratio of about 45%, based
on organic growth. In principle, the remainder is

Human rights

distributed to the shareholders.

Nedap respects the rights set out in the Universal
Declaration of Human Rights, which states that

Decision-making takes into account the interests of

every party in society, including businesses, must

all stakeholders and a responsible balance is sought,

observe and secure human rights.

and usually found, between the commercial results,
social interests and the environment.

Pursuant to the OECD guideline, Nedap will
investigate companies with which it maintains direct

83

Employees and social responsibility

business relations to establish how they deal with

Employees and their expertise are critical success

human rights. A visit to these companies is part of

factors for Nedap. Our business grows as our

Nedap’s normal business procedure.

people grow, so we attach great importance to their

The human rights investigation will be carried

professional and personal development. At Nedap,

out in a manner that is appropriate in the light of

we do all we can to develop existing talent and to

Nedap’s size, the nature and context of its activities

encourage new skills and professional progress.

and the seriousness of the risks of unfavourable

Corporate Governance

human rights effects. Whenever it becomes clear

Child labour, forced labour and slavery

that abuses occur in the field of human rights or

Child labour is defined as any type of work that

any other aspect mentioned below, Nedap will take

prevents children from getting an education,

appropriate measures and, if necessary, switch over

damages their physical and/or psychological health,

to another supplier.

restricts their development or robs them of their
childhood or self-respect. At a minimum, Nedap

Free enterprise

complies with the regulations of the countries in

We support free enterprise and fair competition.

which it operates. Under no circumstances will

We aim to meet the needs of our customers faster,

Nedap use forced labour, employ children in breach

better and more clearly than our competitors. We

of Conventions 138 and 182 of the International

compete fiercely but fairly.

Labour Organization or act in breach of the UN
Convention on the Rights of the Child.

Privacy
We protect the confidentiality of identifiable

Exploitation

personal information regarding customers,

Exploitation of vulnerable individuals or groups will

employees, business contacts and other individuals.

not be tolerated in any circumstances.

Communication

Working conditions

Unless absolute confidentiality is required, we aim

Wages and benefits must fully meet local standards,

for open, accurate and timely communication.

comply with local legislation and be in line with
general principles of justice and fair treatment.

Integrity and responsibility
Ethical and responsible conduct is important to our

Relationships

business. If we do the right thing, people know we

We want to do business with companies that

are a company they can trust. Trust is the basis of

subscribe to our ethical values and meet our social

good interaction. Integrity and honesty are essential

and environmental standards.

in business transactions: there is no room for bribery
or unethical practices, nor for conflicts of interest.
And yet, integrity and responsibility go further than
that. They are about doing things in the right way, as
a company and as individuals.
Treating everyone fairly
We will never discriminate on the basis of race,
ethnic background, age, religion, gender, sexual
orientation or disability. We want our workforce to
be a reflection of the society in which we operate.
All our employees can expect fair and equal
treatment from the company, irrespective of their
job or where they are located.

84

The branding projects what Nedap stands for:

Nedap realises intelligent, technological solutions
for socially relevant themes. Sufficient food for a
growing population, clean drinking water across the
world and smart sustainable energy networks are
just a few examples of the areas in which Nedap is
active. Nedapâ&#x20AC;&#x2122;s products and services all have one
thing in common: they always offer a solution to a
socially relevant problem.
Sustainable entrepreneurship - one of the drivers of
innovation - is integral to Nedapâ&#x20AC;&#x2122;s strategy which is
determined by, and the responsibility of, the Board
of Management. Specific performance objectives let
alone quantitative targets - form part of this. After
all, sustainable entrepreneurship is a continuous
process and not an end in itself.

85

Corporate Governance

Governance

are also given an opportunity to recommend
persons for appointment.

The Supervisory Board and Board of Management
of Nedap believe they comply with the ‘principles

The profile for the size and composition of the

of good corporate governance’ set out in the

Supervisory Board is described in the ‘Profile of the

Dutch Corporate Governance Code. The ‘best

Supervisory Board’ section in the annual report and

practice’ provisions are largely complied with. The

also on the company’s website. The membership of

information required by the Code is provided in

the Supervisory Board conforms with the profile.

various places in the Annual Report.
The professional background of the members has
Reading the ‘best practice’ provisions it soon

also been published. The members are independent

becomes apparent that these are aimed at large

of the company and of each other. None of the

listed companies. This focus of the Code is

members holds more supervisory directorships

understandable given those companies’ individual

at Dutch listed companies than specified in the

social relevance. Smaller companies, such as Nedap,

Code. The Supervisory Board currently has four

are, however, organised completely differently from

members. In view of Nedap’s transparency and the

large listed companies. The management is more

limited size of the Supervisory Board, there are no

in touch with daily practice, and so lines of control

audit, remuneration or selection and appointment

are less formal and more direct. The nature and

committees. Consequently, the full Supervisory

smaller size of such companies also means that

Board is designated to perform the duties of the

the control structure is usually less complex and

audit and other committees. The chairman of

the division of tasks less stringent. Moreover, the

the Supervisory Board oversees the quality and

supervisory boards of smaller companies tend to

frequency of the information flow on the company’s

be more involved in the company and consequently

financial performance, market position, product

have a better understanding of what is happening

development and organisational progress. The

within the company. This, too, obviously improves

Supervisory Board as a whole assesses the financial

the quality of supervision in general. In cases where

and other information.

the detailed nature of the ‘best practice’ provisions
is designed to address typical governance issues

The remuneration arrangements made with the

at large listed companies, the ‘apply or explain’

Board of Management are set out below. The

rule does not provide enhanced insight into the

chairman and a member of the Supervisory Board

application of the desired principles of sound

hold annual appraisal interviews with the members

corporate governance and supervision at smaller

of the Board of Management on the basis of

companies. Nevertheless, departures from the

predefined targets. The variable income of the Board

provisions will be disclosed and explained as

of Management is determined by the performance

required.

of its members with respect to those targets. The
maximum variable remuneration is 90% of the fixed

Management and supervision

annual income.

Nedap falls within the ‘statutory two-tier board

86

system’ and so supervisory directors are appointed

Given the small size of the Supervisory Board, the

by the general meeting of shareholders on a

experience of its members and the need for flexible

nomination of the Supervisory Board. In this

working procedures, the Board has not drawn up any

connection, the shareholders and the Works Council

formal regulations.

The Board of Management has two members. The

increase provided for in the Nedap’s Collective

Supervisory Board members believe that appointing

Labour Agreement.

directors for four-year terms would impede
the proper performance of their role within the

II Variable annual income

company. The directors are entrusted with the task

The variable annual income depends on the

of mapping out the company’s long-term strategy

members of the Board of Management meeting

and translating that strategy into effective policy.

targets set in advance by the Supervisory Board.

Four-year mandates are not sufficient to adequately

One third of the variable income is determined

fulfil this role at a company like Nedap. The annual

by financial targets, one third by targets relating

appraisal interviews also enable the Supervisory

to the development of the internal organisation

Board members to monitor the performance of

and one third by targets focusing on the way

the directors more effectively than if they were

in which the organisation operates in its

reappointed once every four years.

environment. 60% of the fixed annual income
is paid for performance at target level, with a

The members of the Board of Management do not

maximum of 90% of the fixed annual income.

hold supervisory board memberships with any other
companies, nor do they hold any interests in other

Each director must contribute at least 50% of

companies that conflict with those of Nedap. Given

his variable annual income after tax to Stichting

Nedap’s size and market position, the Supervisory

Medewerkerparticipatie Nedap in exchange for

Board and the Board of Management see no need to

depositary receipts. This means that a significant

draw up ‘regulations concerning ownership of and

part of the variable income is dependent on the

transactions in securities by board members, other

company’s long-term performance.

than securities issued by their own company’. It
has been agreed that the acquisition of interests in

The Supervisory Board may increase or decrease

another company that might give rise to a potential

the variable income if in its opinion the calculations

conflict of interests shall be avoided and, in case of

lead to an unreasonable outcome.

doubt, shall be discussed in advance. This applies
to members of both the Supervisory Board and the
Board of Management.
Remuneration policy for the Board of Management
The aim of the remuneration policy is to have a
compensation package for the Board of Management
that contributes to attracting and retaining qualified
and expert directors, ensuring and advancing the
medium and long-term interests of the company.
The compensation package for the Board of
Management comprises:
I

Fixed annual income
Fixed annual income that is revised each year at
least by a percentage equal to that of the salary

87

Corporate Governance

If variable remuneration is granted on the basis

resolutions are subject to the approval of the

of incorrect information, the Supervisory Board is

Supervisory Board.

entitled to recover it from the director concerned.
The remuneration package for the Board of

Each year the Board of Management provides

Management has been set taking into account

the Supervisory Board with an outlook for the

internal pay relationships and market information.

coming years which, on the basis of the then

The remuneration package is reviewed regularly to

available knowledge, sets out the company

ensure that it is still competitive and in line with the

strategy and provides a breakdown of figures for

weight and complexity of the duties.

the coming year, as well as forecasting expected
developments for the foreseeable future.

The pension scheme for the Board of Management is

based on average pay, with general salary increases

The Board of Management also reports regularly

also being included over past years of service.

(ten times per year) to the Supervisory Board

Pension rights are accrued at a rate of 2% per year.

on the actual performance versus budget. The

The pensionable salary is based on the fixed annual

Supervisory Board meets at least five times per

income.

year, and more often as necessary, to discuss
these reports

No arrangements have been made with the
members of the Board of Management regarding a

II The market group managers set out their views
each year in the budget. This includes, on the

period of notice or redundancy scheme.

basis of the objective, the plans relating to
No loans, advances or guarantees have been

the market, R&D efforts, staffing and capital

granted to the directors.

investments.

Management System

The market group managers also report regularly

Nedap has an adequate and effective Management

(ten times per year) to the Board of Management

System which is designed to:

on the actual performance versus the budget.
In addition to this reporting system, a regular
exchange of information takes place between

– test actual progress and performance against the

the Board of Management and market group.

objectives,

This is made easier by the fact that the Board of

– enable management to retain control over

Management and the market group management

responsibilities delegated to others,

are both based in Groenlo.

– manage cash and other flows representing a
monetary value within the organisation,
– identify and restrict risks,

In addition, the Board of Management and the
market group managers also consult prior to any

– prevent fraud.

definite decision-making on:
The internal information and reporting flows are as
follows:
I

The Board of Management states that the internal
control system as described provides a reasonable

III Internally, Controlling in Groenlo plays a leading

degree of assurance that the financial reporting is

role in the analysis the strategy and the various

free of material errors or an incorrect presentation

plans and monitors the implementation versus

of facts. The financial reports give a true and fair

set targets.

view of the companyâ&#x20AC;&#x2122;s financial situation and results

This department ensures that the administrative

of its activities and the required notes. The internal

organisation and data processing are sufficient

control system has operated satisfactorily during the

to ensure the uniform and correct handling of

year under review.

all financial and business matters. It has set up
a uniform reporting system based on standards

There was intensive contact during the year with

(including explanatory notes) that is designed to

the management of subsidiaries and market groups

supply the information required by the Board of

and Controlling on transactions undertaken by the

Management.

company and on detailed oral and written reports
on revenue, expenses and progress. The Board of

The department also ensures the correct,

Management and market groups are based at the

complete and timely delivery of these reports

same address; information is exchanged daily.

(ten times a year).
There were no significant changes to the

The Controlling department monitors the risks,

Management System during the year under review

manages value flows within the organisation and

and no significant changes are planned. Nearly the

ensures that contracts and statutory regulations

entire organisation uses the same ERP system. This

are complied with, reporting where necessary

was discussed with the Supervisory Board.

to the Board of Management. It assesses the

various administrative organisations, also

Despite the existence of risk management systems,

devoting attention to the prevention of possible

material errors, fraud or unlawful actions can still

fraud.

take place. The system therefore does not provide

In addition, the Controlling department assesses

absolute assurance that targets will be achieved, but

in what situations and to what extent currency

has been developed to obtain reasonable assurance

risks can and must be hedged.

as to the effectiveness of controls implemented to
mitigate financial and operational risks in relation to

The potential risk arising from insolvent
customers is reduced by means of credit
insurance.

89

organisational objectives.

Corporate Governance

External communications

in this connection. Staff should always put

Nedap publishes an overview of the company’s

the interests of the customer and Nedap

performance and progress at least five times a year.

first in their actions. Against this background

In addition to the Annual Report, there are

Nedap’s management plays a vital role in

first-half and full-year financial reports,

keeping everyone aware of these principles.

supplemented with two interim reports in the spring

Ultimately, a good example will be followed.

and autumn on relevant market developments, key

A written code of conduct would not be

events and transactions and their effects on Nedap’s

appropriate for the type of organisation that

financial position, along with a general description

Nedap is and would be contrary to the way in

of the financial position. These reports and much

which we deal with one another.

more information can be found on the website www.
II.1.7 The management board shall ensure

nedap.com.

that employees have the possibility
Best practice provisions

of reporting alleged irregularities of a

Given the company’s innovative, project-driven

general, operational and financial nature

and flexible style of entrepreneurship, Nedap has

within the company to the chairman of

opted to apply certain provisions of the Corporate

the management board or to an official

Governance Code in a different way. All such

designated by him, without jeopardising

instances of non-standard application are explained

their legal position. Alleged irregularities

below in the same order as the Code:

concerning the functioning of management
board members shall be reported to the

II.1.1 A management board member is appointed

chairman of the supervisory board.

for a maximum period of four years. A

The arrangements for whistleblowers shall
be posted on the company’s website.

member may be reappointed for a term of
not more than four years at a time.

The relationships and open structure within

Given the long-term nature of Nedap’s

the Nedap organisation are such that alleged

policy, members of the company’s Board of

irregularities can be exposed without fear

Management are appointed for an indefinite

of repercussions, regardless of the rank

period of time. A director’s length of tenure

or status of the alleged perpetrator. No

depends on his performance which is

separate rules are necessary for this purpose.

reviewed annually by the Supervisory Board.
II.2.8 The remuneration in the event of dismissal
may not exceed one year’s salary (the ‘fixed’

II.1.3 The Company shall, in any event, employ as
instruments of the internal risk management

remuneration component). If the maximum

and control system:

of one year’s salary would be manifestly
unreasonable for a management board

b) code of conduct should be published on

the company’s website;

member who is dismissed during his first

Nedap and its staff act in an honest and

term of office, such board member shall be

honourable manner. This integrity is not

eligible for severance pay not exceeding
twice the annual salary.

based on a whole range of formal rules, but
on what any normal person knows to be

90

As was pointed out with respect to II.1.1,

right or wrong. Honesty and the courage and

members of Nedap’s Board of Management

freedom to admit one’s mistakes are crucial

are appointed for an indefinite period

performance criteria have been fulfilled.

and there is therefore no such thing as
a ‘first term of office’. In the unfortunate

h) an ex-ante and ex-post account of

event that a director’s performance proves

the relationship between the chosen

unsatisfactory, then the severance pay will

performance criteria and the strategic

be partly determined by the number of years

objectives applied, and of the relationship
between remuneration and performance.

of service at Nedap.
II.2.13 The overview referred to in best practice

As the selected targets cannot be set out in
greater detail than in f), an account of the

provision 2.12 shall in any event contain the

relationship between these targets and the

following information:

strategic objectives cannot be given to the

f) a description of the performance

extent that the targets would have to be

criteria on which the performance-related

disclosed for this. A significant proportion of

component of the variable remuneration

the variable income is dependant on Nedap’s

is dependent in so far as disclosure would

long-term strategy and performance since

not be undesirable because the information

each director must contribute at least 50%

is competition sensitive, and of the

of their variable annual income after tax to

discretionary component of the variable

Stichting Medewerkerparticipatie Nedap

remuneration that can be fixed by the

in exchange for depositary receipts. These

supervisory board as it sees fit;

depositary receipts are locked up for a period

The remuneration package for the Board of

of four years. With respect to the relationship

Management comprises fixed and variable

between reward and performance ex ante

annual income. The variable annual income

and ex post it is only possible to say that

depends on the members of the Board of

60% of the fixed annual income is paid for

Management meeting targets set in advance

performance at target level, with a maximum

by the Supervisory Board.

of 90% of the fixed annual income.

One third of the variable income is
determined by financial targets, one third

II.2.14 The main elements of the contract of a

by targets relating to the development of

management board member with the

the internal organisation and one third by

company shall be made public after it has

targets focusing on the way in which the

been concluded, and in any event no later

organisation operates in its environment. As

than the date of the notice calling the

far as possible, the Supervisory Board will set

general meeting where the appointment

quantifiable objectives for these targets. No

of the management board member will

further details of the targets can be given for

be proposed. These elements shall in any

competitive reasons.

event include [...] performance criteria to be
applied.

g) a summary and account of the methods
that will be applied in order to determine

At Nedap, members of the Board of

whether the performance criteria have been

Management are appointed by the

fulfilled;

Supervisory Board after announcing the
proposed decision to the general meeting.

As no further details of the targets are being
given, it is also difficult to give a summary

91

The performance criteria are not set out in

and account of the methods that will be

greater detail as explained in Remuneration

applied in order to determine whether the

of the Board of Management.

Corporate Governance

III.1.1 The division of duties within the supervisory

III.3.5 A person may be appointed to the

board and the procedure of the supervisory

supervisory board for a maximum of three

board shall be laid down in terms of

four-year terms.

reference. The supervisory board’s terms of

length of tenure of its members should be

with its relations with the management

determined by their quality and contribution

board, the general meeting and the central

in combination with the specific knowledge

works council or works council. The terms of
reference shall be posted on the company’s

The Supervisory Board considers that the

reference shall include a paragraph dealing

they bring to Nedap.

The performance of the Supervisory Board

website.

and its members are evaluated annually.

In view of the nature of the Company and the

The Articles of Association stipulate that a

company-specific working procedures of the

member’s tenure shall end upon reaching

Supervisory Board as set out in the Report of

the age of 72.

the Supervisory Board to the Shareholders,
and given also the size of the Board and the

III.4.1 The chairman of the supervisory board shall
see to it that:

desired flexibility, the Supervisory Board
considers it undesirable to lay down formal

a) the supervisory board members follow

procedures for its dealings with the Board

their induction and education or training

of Management, the General Meeting of

programme;

Shareholders and the Works Council.

As pointed out with respect to III. 3. 3,
Nedap has no formal induction programme.

III.3.3 After their appointment, all supervisory

It goes without saying that the chairman

board members shall follow an induction

of the Supervisory Board ensures that

programme, which, in any event, covers

the competencies of the members of the

general financial and legal affairs, financial

Supervisory Board match the profile of the

reporting by the company, any specific

Board and that they are effectively inducted

aspects that are unique to the company

into the Company.

and its business activities, and the
responsibilities of a supervisory board

III.6.5 … The company shall draw up regulations
governing ownership of and transactions in

member.

securities by management or supervisory

The supervisory board shall conduct an
annual review to identify any aspects

board members, other than securities issued

with regard to which the supervisory

by their ‘own’ company.

board members require further training

92

An agreement is in place whereby interests

or education during their period of

in other companies involving a potential

appointment. The company shall play a

conflict of interests are avoided and, in

facilitating role in this respect.

case of doubt, discussed in advance with

The size of Nedap as well as its

the Supervisory Board. Given Nedap’s size

organisational setup are such that no formal

and market position, the Supervisory Board

induction programme is necessary. Newly

sees no need to draw up written regulations

appointed members naturally receive an

regarding members of the Board of

appropriate introduction, including a visit to

Management holding and dealing in shares

the head office in Groenlo.

in companies other than Nedap.

IV.1 Principle

IV.3.9 …………. and resolutions for the appointment
of management board members [...] shall

............. The Company shall, in so far as

be submitted separately to the general

possible, give shareholders the opportunity

meeting.

to vote by proxy and to communicate with
all other shareholders.

As explained in II.2.14 directors are

Nedap does not have an international

appointed by the Supervisory Board after

shareholder base. Nedap considers that

announcing the proposed decision to the

the interest its shareholders have in the

general meeting. Consequently, formally no

Company and its culture is demonstrated

proposal to appoint directors is submitted to

by their personal attendance at the General

the general meeting.

Meeting of Shareholders and, if necessary,
V.2.1 The external auditor may be questioned by

their participation in the discussion. Personal
attendance is particularly important when

the general meeting in relation to his report

matters of substance are being discussed.

on the fairness of the financial statements.

Shareholders may vote by proxy, where

The external auditor shall for this purpose

necessary.

attend and be entitled to address this
meeting.

IV.1.4 The policy of the Company on additions to

Pursuant to Article 42(3) of the Articles of

reserves and on dividends (the level and

Association, Nedap’s auditor reports on his

purpose of the addition to reserves, the

audit to the Supervisory Board and the Board

amount of the dividend and the type of

of Management. The result of his audit is

dividend) shall be dealt with and explained

set out in a statement certifying that the

as a separate agenda item at the general

financial statements give a true and fair view

meeting of shareholders.

of the financial position of the Company in

Nedap’s policy on additions to reserves

conformity with the International Accounting

and dividends is directly determined by its

Standards Board and accepted by the

strategy and long-term policy and will be

European Union and Part 9, Book 2 of the

discussed in that context. The long-term

Netherlands Civil Code and that they comply

policy is aimed at creating sustainable added

with the statutory provisions for financial

value for customers, staff and shareholders.

statements stipulated in Part 9, Book 2

The policy of additions to reserves and

of the Netherlands Civil Code and, to the

dividends will be a discussion item on the

extent of his competence, that the Board of

agenda.

Management report is consistent with the
financial statements as required by 2:391

IV.1.5 A resolution to pay a dividend shall be

sub 4 of the Netherlands Civil Code. This

dealt with as a separate agenda item at the

independent auditor’s report is included in

general meeting of shareholders.

the Other information section. The activities

As pointed out with respect to IV.1.4, the

of the auditor are described in the ‘Auditor’s

dividend payment is directly determined by

responsibility’ section of the Independent

the strategy and the long-term policy. The

Auditor’s Report. This is self-explanatory.

dividend payment will be explicitly included
on the agenda as a separate item.

Independent auditor’s reports at Nedap
are unqualified, and so no additional

93

Corporate Governance

clarification is necessary. Should any
provisos be included, these will be disclosed
and explained in the Annual Report in
conformity with the accountability of
the Supervisory Board and the Board of
Management vis-Ă -vis the shareholders. In
the view of the Supervisory Board and the
Board of Management, the presence of the
external auditor at the General Meeting of
Shareholders is therefore unnecessary.
V.3.1 The external auditor and the audit
committee shall be involved in drawing up
the work schedule of the internal auditor.
They shall also take cognizance of the
findings of the internal auditor.

In view of its size, Nedap does not have an
internal auditor (or an audit committee). It
goes without saying that the external auditor
performs the annual audit with due attention
to the existence and implementation of
the internal audit and control system. The
external auditor attends the meeting of the
Supervisory Board at which the financial
statements are discussed.

94

Chairman of

Board of

the Supervisory Board:

Management:

G.F. Kolff

R.M. Wegman

G.J.M. Ezendam

Information on the company structure and control

Since 1973, Nedap has been able to issue

pursuant to the Decree on section 10 of the

preference shares as an anti-takeover measure. This

Takeover Directive

protection can be deployed if a third party intends
to gain control of the company by acquiring a

Capital structure

decisive interest or otherwise attempts to adversely

Nedap’s authorised share capital consists of

affect Nedap, without ensuring the interests of

15,600,000 ordinary shares of € 0.10 nominal value

Nedap, its business and all stakeholders in a

each and preference shares of € 0.10 nominal value

satisfactory way.

each. The preference shares are registered. The
ordinary shares are bearer shares.

Stichting Preferente Aandelen Nedap

The issued share capital is € 669,292 consisting of

To this end, the Stichting Preferente Aandelen

6,692,920 ordinary shares.

Nedap (‘Stichting’) was set up in 1973. The Stichting
looks after the interests of Nedap, its business

The ordinary shares are listed on NYSE Euronext

and all stakeholders, defending as far as possible

Amsterdam and are freely tradable. They are

against influences which could threaten continuity,

embodied in a ‘global note’ that is held in custody

independence and identity in conflict with those

by Necigef on behalf of the shareholders.

interests.

Stichting Medewerkerparticipatie Nedap

Nedap has granted the Stichting the right to acquire

Following the foundation of Stichting

preference shares (call option) under which, on

Medewerkerparticipatie Nedap (Stichting) in 2009,

request, it can acquire preference shares up to a

employees have been able to acquire depositary

maximum equal to the number of ordinary shares in

receipts for shares in Nedap since 1 January 2010.

issue less one at the time the option is exercised.

This ability to become a depositary receipt holder

The call option obliges Nedap to issue the number

in the company is in line with the enterprise that

of preference shares requested by the Stichting

is demanded of the employees. It also offers

whenever it makes that request. Consequently, no

employees the possibility to be heard through the

further decision by any corporate body of Nedap is

Stichting at the general meeting of shareholders

required; the decision was taken when the option

when fundamental decisions are being taken on

was granted to the Stichting.

Nedap’s direction and future. Each year, employees
may decide to use all or part of their profit share

If preference shares are issued, the Stichting has to

for this. The depositary receipts are locked up for

pay at least 25% of their nominal value in cash.

a period of four years. In addition to a purchase
discount of 10% on the depositary receipt price,

The members of the Executive Board of the Stichting

subject to certain conditions, one bonus depositary

are:

receipt is distributed for each four depositary

95

receipts after four years. The full dividend on each

J.C.M. Hovers, chairman

depositary receipt is attributed to the depositary

J. Lock, secretary

receipt holder. At 31 December 2013, the Stichting

A.P.M. van der Veer-Vergeer

held 69,328 shares in Nedap for which it had issued

R.P. Voogd

depositary receipts to employees.

J.P. Bahlmann

Corporate Governance

The membership of the Executive Board of the

wish to attend the general meeting of shareholders

Stichting is intended to ensure the interests of all

can announce this by the date set by the Board of

stakeholders in Nedap in decision-making.

Management of Nedap, which cannot be earlier

The officers of the Stichting and Nedap share the

than the seventh day before the general meeting,

opinion that Stichting Preferente Aandelen Nedap

through their bank or broker where the shares are

and Nedap itself are independent of one another

administered, by requesting a receipt which acts as

within the meaning of section 5.71(1c) of the

a ticket to the meeting.

Financial Supervision Act.
Disclosure pursuant to Act on the Disclosure of
Preference shares take precedence over ordinary

Major Holdings in Listed Companies

shares for dividend distributions and distributions

The Netherlands Authority for the Financial

of capital paid in on the shares in the event of

Markets (AFM) published the information on

Nedapâ&#x20AC;&#x2122;s liquidation.

holdings reported in connection with control and
shareholdings given below.

Voting rights
Every share is entitled to one vote. There are no

There are no material transactions between legal or

restrictions on voting rights. Shareholders who

natural persons who hold at least 10% of the shares

February 2014

in %

February 2013

in %

ASR Nederland N.V.

8.20

8.20

15.11

15.11

Darlin N.V.

5.19

5.19

Decico B.V.

5.01

5.01

Delta Lloyd Deelnemingen Fonds N.V.

13.45

13.45

Delta Lloyd N.V.

12.60

12.60

Kempen Oranje Participaties N.V.

7.11

7.11

TKH Group NV

5.06

5.06

(100.00)

(100.00)

71.73

71.73

Cross Options Beheer B.V.

(Stichting Preferente
Aandelen Nedap (potential))
Total

in Nedap as meant by provision III. 6.4 of the Dutch

The Supervisory Board notifies the general meeting

Corporate Governance Code.

of shareholders of the proposed appointment. The
Supervisory Board will not dismiss a director until

Appointment and dismissal of directors

the general meeting of shareholders has been able

Nedap is a two-tier company and so members of

to decide on the proposed dismissal.

the Board of Management are appointed by the
Supervisory Board.

96

Appointment and dismissal of supervisory directors

proposal of the Supervisory Board and the Board

Supervisory directors are appointed by the general

of Management. A resolution to issue preference

meeting of shareholders on a proposal of the

shares by a body other than the general meeting

Supervisory Board, generally for a period of four

of shareholders is always subject to co-operation

years. This proposal is made on the basis of a profile

of the Supervisory Board in each specific case.

drawn up by the Supervisory Board. The general

Preferential rights can be limited or excluded by the

meeting of shareholders and the works council may

body appointed to decide on share issues.

recommend people as supervisory directors. The
works council has an enhanced right of nomination

Nedap may only acquire its own fully paid shares

for one member of the Supervisory Board.

for no consideration. Acquisition other than for no
consideration is only possible if:

The general meeting of shareholders may reject a

– the equity less the acquisition price is no smaller

nomination by an absolute majority of the votes cast

than the paid up and called up portion of the

representing at least one third of the issued capital.

capital plus the reserves required to be kept by

The Enterprise Section of the Amsterdam Court of

law and the articles of association;

Appeal may on application dismiss a supervisory
director for neglect of duty, other weighty reasons
or significant changes in circumstances such

– the nominal amount of the treasury shares is no
more than 50% of the issued share capital; and
– the General Meeting of Shareholders has

that continuing as supervisory director cannot

so authorised the Board of Management.

reasonably be demanded of the company. The

This authority is not required to acquire the

application may be submitted by the company,

company’s own shares or depositary receipts for

represented by the Supervisory Board, or a

them for transfer them to employees under an

representative designated by the general meeting of

applicable plan.

shareholders or the works council.
Amendment of the articles of association
The general meeting of shareholders may pass

Nedap’s articles of association may be amended by

a resolution of no confidence in the entire

a resolution of the general meeting of shareholders

Supervisory Board by an absolute majority of the

after prior approval of such resolution by the

votes cast representing at least one third of the

Supervisory Board and Board of Management.

issued capital. Such a resolution brings about
the immediate dismissal of the members of the

Restrictive agreements with shareholders

Supervisory Board.

To the best of Nedap’s knowledge, its shareholders
are not a party to an agreement that could lead to

Authority of the Board of Management to issue

restrictions on trading in Nedap shares or on voting

shares and acquire treasury shares

rights.

The Board of Management is only authorised to
issue shares if the general meeting of shareholders

Significant matters on a take-over bid

appoints it as the body authorised to issue shares.

The standby roll-over credit agreement (€ 14

This appointment has not been made. A resolution

million) that Nedap has entered into with the bank

by the general meeting of shareholders issue

includes a provision under which the bank can

shares, to appoint another body as the body

demand early repayment of the loan if there is a

authorised to issue shares or the withdrawal of a

significant change in control over Nedap’s activities.

resolution to appoint can only be passed on a joint

97

Corporate Governance

It is not unusual for other long-term alliances to
which Nedap is a party also to include the possibility
of terminating the agreement with immediate effect
in the event of a â&#x20AC;&#x2DC;change of controlâ&#x20AC;&#x2122;. The overall
scope of these clauses is not regarded as significant
as meant by the Decree on Section 10 of the
Takeover Directive.
Nedap has not entered into agreements with
directors or other employees under which
personal rights to compensation can be derived
on termination of their employment after the
settlement of a take-over bid for Nedap shares.

98

Provisions of the Articles of Association
concerning Special Rights
The Supervisory Board and the Board of
Management have been granted certain special
rights, including:
Art. 10:
Proposal to issue new shares.
Art. 11:
Proposal to restrict or exclude preferential rights.
Art. 18:
Determination of the number of members of the
Board of Management.
The Supervisory Board has been granted certain
special rights, including:
Art. 23:
Proposal for the setting the remuneration policy for
the Board of Management.
Setting the remuneration and other terms of
employment of each member of the Board of
Management.
Proposal to remunerate the Board of Management
in the form of shares or rights to acquire shares
Art. 24:
Setting the number of members of the Supervisory
Board.
The Board must comprise at least three members.
Art. 25:
Nomination for appointment to the Supervisory
Board.

99

Corporate Governance

Provisions of the Articles of Association
concerning Approval of Resolutions by the Board
of Management in accordance with Article 20

reported in the Company’s balance sheet and
notes;
g. a proposal to amend the Articles of Association;
h. a proposal to dissolve the Company;

Paragraph 1:
Without prejudice to provisions elsewhere in these
Articles of Association, the following resolutions by

i. a resolution to file a petition in bankruptcy or to
apply for a suspension of payments;
j. a resolution to terminate the employment

the Board of Management shall be subject to the

contracts of a substantial number of employees

approval of the Supervisory Board:

of the Company or a dependent Company

a. resolution to issue or acquire shares in or debt
instruments payable by the Company or debt

simultaneously or within a short period of time;
k. a resolution to implement radical changes in

instruments payable by a limited partnership or

the working conditions of a substantial number

general partnership in which the Company is a

of employees of the Company or a dependent

fully liable partner;
b. co-operating with the issue of registered
depositary receipts for shares;
c. applying for the listing of the debt instruments

Company;
l. a proposal to effectuate a reduction in the
issued capital;
m. a proposal to legally merge the Company

or depositary receipts referred to in a and b

within the meaning of Part 7 of Book 2 of the

on a regulated market or multilateral trading

Netherlands Civil Code.

facility, as referred to in Section 1:1 of the Act
on Financial Supervision or system comparable

Paragraph 2:

with a regulated market or multilateral trading

The following resolutions by the Board of

facility in a state not being a Member State or

Management shall also be subject to the approval

an application for the withdrawal of such listing;

of the Supervisory Board:

d. a resolution to enter into or cancel any
long-term co-operative relationship between

financial objectives of the Company, the

the Company, or any dependent Company,

strategy pursued to achieve these objectives

and another legal entity or Company, or in its
capacity as a fully liable partner in a limited

and the applicable strategic parameters;
b. a resolution to appoint officials as referred to in

partnership or general partnership, if such

Article 19, paragraph 2, and/or to confirmation

co-operation or cancellation has a substantial

of their ad hoc status;

impact on the Company;
e. a resolution to have the Company or any
dependent Company take any interest in the
share capital of another Company worth no less
than one fourth of the Company’s issued capital
plus reserves as reported in the Company’s
balance sheet and notes, or a resolution to
radically increase or reduce any such interest;
f. a resolution to make investments involving

100

a. the determination of the operational and

c. a resolution to engage in legal proceedings,
with the exception of taking protective
measures or measures which brook no delay;
d. a resolution to acquire, dispose of, or encumber
registered property;
e. a resolution to enter into a contract of
suretyship;
f. a resolution to conclude a loan or credit
agreement; should a credit agreement already

an amount of no less than one fourth of the

have been concluded, the consent of the

Company’s issued capital plus reserves as

Supervisory Board shall not be necessary for it

to be utilised;

g. a resolution to enter into a merger, or to acquire,
wind up, or dispose of a participation;
h. a resolution to found or close down a branch.
Paragraph 3:
The Supervisory Board may determine that a
resolution as referred to in paragraph 2 above will
not require its approval if the interest involved
does not exceed a value to be determined by the
Supervisory Board.
Paragraph 4:
The Board of Management requires the approval
of the General Meeting for decisions involving a
significant change in the identity or nature of the
Company or its business undertakings, including:
a. transfer of the business undertakings or
virtually the entire business undertakings to a
third party;
b. the creation or discontinuation of a
long-standing co-operative relationship
between the Company or a subsidiary with
another legal entity or Company or as a fully
liable partner in a general limited partnership
if said co-operation or discontinuation thereof
has far-reaching implications for the Company;
c. the acquisition or disposal by the Company
or a subsidiary of an associate in the capital
of a Company to the value of at least one
third of the assets according to the balance
sheet with notes or, if the Company prepares
a consolidated balance sheet, according to
the consolidated balance sheet with notes, as
stated in the most recently adopted financial
statements of the Company.
Paragraph 5:
The absence of the approval of the Supervisory
Board or the General Meeting for a decision
as intended in this article does not impair the
representative authority of the Board of Management
or its members, except in relation to a decision as
referred to in paragraph 1(l) and paragraph 2(a).